Financial charts, what you need to know and how to read them!
When trading on the exchange, you always use one or another chart. A trader from them takes the data for technical analysis. They help to visually track changes in quotations at different time intervals. Let’s find out together how to read chrts and make the most of them. On this page you have access to financial charts free in real time.
Your most important friend and helper at the exchange is a finance chart of price movements. There are several types, which will help you better understand the price movements of stocks and other assets.
A line investment graph is a graphical representation of the price movements of an asset. It gives little information and does not allow for a complete technical analysis.
“Bars” investment graph
The bar chart shows the highest and the lowest price levels at any given time interval. You can use it to know the opening and closing prices of the asset of interest, as well as the maximum and minimum price in each time interval.
“Japanese Candlesticks” financial market graph
The most popular financial market graph. Similar in characteristics to “Bars”, but much more convenient visually.
This financial chart online is also called “tic-tac-toe”. The bars on it represent the change in the price of the asset. The cross-shows the growth by a given number of points; the zero-shows the fall. There is no time reference.
It is used only as an addition. It visually shows the information on the volume of performed trades. The value of the height of lines indicates a high turnover of the asset of interest.
The ability to understand financial graphs is of paramount importance when building a trading strategy based on technical analysis. Until you learn to see what the investing chart is telling you, you will not have any buy or sell signals. Let’s understand now the key varieties; they are also the most demanded.
What information does the line chart give us?
The line financechart is the simplest, respectively, and the amount of information it provides is minimal. When a trading period is closed, the line shows its value. It displays the general trend, showing us whether the price of the asset is falling or going up. Usually, the time frame that is set for it is set for at least one day.
What information do the Bars give us?
The “Bars” allow you to track both the closing price and the opening price on time intervals. They are a little more informative than the previous version, but they are in demand among traders abroad.
Externally, “Bars” look like vertical bars with notches on the sides. On the borders, you can see the maximum and minimum price values. Most often, you can find out the price by pointing the mouse pointer at the part of interest.
The price fluctuations at different time frames can be clearly seen here. The notches carry information about whether the price is falling or rising. If the left bar is lower than the right one, we can see that the price is going up, if it is vice versa. Bars help to see the trend and predict a trend reversal.
What do Japanese candlesticks tell us?
It is the most popular and convenient financial graph. Thousands of traders around the world give it their preference. The Japanese candlesticks began to be used in the 17th century in the sale of rice.
Visually, it looks like a rectangle of solid color (the body of the candle) with tails up and down (the shadows of the candle). Each candlestick contains the data of the price fluctuations for the selected timeframe. The trader selects the time frame in the settings. A new candlestick is formed at each time frame.
Japanese candlesticks are very well perceived visually, as part of the information is presented in the form of color. The color of the candlestick depends on whether the price of the asset is rising or falling. Usually in the default setting, the candlesticks are black and white. A black candlestick signals that the price has fallen in the selected time frame, and a white candlestick shows the opposite.
Each candle has:
- The body of a candle, which consists of the closing and opening price.
- The shadows that come from the candlestick (lower and upper) show the maximum and minimum values that the price of the asset has reached in a given period.
Let’s take a look at what a Japanese candlestick looks like and break down each element of a candlestick.
The candlestick and its shadows depend on the rise and fall of prices, as well as the volume of this process. Each candle individually is a kind of model, which may have a name (Doji, hammer, etc.). And several of these candlesticks can form a pattern which gives a signal for the purchase or sale of an asset. For example, a hammer pattern signals a trend reversal.
Any candlestick pattern gives an indication that a trend is either reversing or continuing in its direction. The shadows of candlesticks often have more information than the body of the candlestick. Very often, the longer the shadow of a candlestick is in the low direction, the more likely it is that the trend will reverse in the high direction. And if the long shadow is formed in the direction of the maximum of the price, it may indicate a trend reversal in the down direction.
Your success in trading depends on reading investment charts correctly. Study the charts, make friends with them, and they won’t stay in your debt. Have a good trade, friends.